The Central Bank of Iran has required licensed currency exchange bureaus to report buy/sell rates shown on their electronic boards also on a central e-platform accessible to the public.
The move is to help improve transparency of the performance of the moneychangers, said a press release seen on the website of Iran’s regulated market, officially known as Iran Currency Exchange (ICE).
Rates would be available to the public via ice.ir, the official ICE website.
Speaking at the unveiling ceremony of the central platform Monday, Ali Salehabadi, the CBI governor, said, "People will soon be able to buy foreign currency using the platform…Money will either be transferred to their accounts or can be delivered in cash," CBI's website quoted him as saying.
A limited number of currency shops have joined the platform and are updating rates. However, all 545 licensed exchange shops will be linked gradually to the system, Salehabadi said.
The regulated market is a network of certified exchange shops and banks dealing in wholesale currency under CBI auspices.
He noted that some foreign exchange companies have also applied to connect to the regulated market and their requests are being reviewed. He did not elaborate.
Regarding the steep fluctuations in the forex market, the senior banker said the CBI will enforce “strict measures about forex rates in the coming days.
The greenback closed in the unofficial market Monday at 333,000 rials, an all-time high. The euro bought 324,970 rials, up 3.5% in three days, the UAE dirham was almost unchanged on the session before buying 91,900 rials after a 3% increase on Saturday.
Parallel Measures
On earlier CBI moves to supply the currency market with enough money, Salehabadi said, allowing non-oil exporters to sell their currency at “negotiated rates” was a timely measure in the right direction.
“Exchange rates and the volume of forex operations is available to the public on the ICE website.”
He added that $600 million in cash was traded via the negotiated rate mechanism since the implementation of the measure, which should help reduce forex demand in the unofficial (open) market.
Back in June, the CBI allowed moneychangers to buy currency from exporters at negotiated prices.
The move was welcomed by exporters because it allows them to sell their cash currency at rates higher than the Nima platform, where rates are always lower than the open market.
According to Salehabadi, currency supply via Nima posted 80% growth in the first half of the current fiscal year.
“Since the beginning of this year (in March), $22.43 billion was traded in this market, up 80% compared to the $12.36 billion last year same time.”
Nima is an online platform affiliated to the CBI through which exporters sell their overseas currency income in the form of hawala. Through this platform companies buy currency for importing goods, machinery, equipment and raw materials.
In this system, importers declare their currency needs, exporters register their proceeds and banks and authorized moneychangers are brokers.
In May the government officially put an end to the highly controversial currency subsides ($1=42,000 rials), better known as preferential currency, which was given to importers of essential goods like food, medicine and some raw materials.
Soon after businesses argued that with the end of the subsidy policy they would obviously need extra infusions of cash for importing raw material to bridge the huge gap between subsidized and the open market rates.
They urged the government to reconsider and compensate the looming liquidity crunch.
Release of Frozen Assets
Salehabadi reflected on reports about the anticipated release of Iran's frozen assets in South Korea. "Negotiations have made progress…We will inform the public about the good news in the coming days."
"That money belongs to the CBI, not the government, and will be transferred to the CBI when available," he said. "A portion of the money will go to the National Development Fund of Iran," the sovereign wealth fund. He did not provide details.
An estimated $7 billion in Iranian assets is held in the Industrial Bank of Korea (IBK) and Woori Bank due to the 2018 US economic blockade.
